Bank Millennium Sa · GPW:MIL

Bank Millennium Sa — Merger or Acquisition (November 2018)

15 slides from Bank Millennium Sa's merger presentation, Nov 5, 2018

  1. Slide 1: Bank Millennium acquisition of eurobank

    Bank Millennium acquisition of eurobank 5 November 2018

  2. Slide 2: Disclaimer

    Disclaimer This presentation (the “Presentation”) has been prepared by Bank Millennium S.A. (“Bank”) solely for information purposes and is addressed only to investors and analysts. This Presentation should not be treated as part of an invitation or offer to sell any securities, invest or deal in, o

  3. Slide 3: Transaction highlights

    Transaction highlights Transaction  Bank Millennium S.A. (“the Bank”) will acquire c.a. 99.79% stake in Euro Bank S.A. (“eurobank”) from SG Financial Services description Holding, subsidiary of Société Générale S.A. Purchase price  Agreed reference price of 1 833 mln PLN adjusted by variation of n

  4. Slide 4: eurobank at a glance

    eurobank at a glance Overview (all numbers as at 30 Jun-18) Key financials  eurobank was established in 2003 by Mariusz Łukasiewicz as a result of ’15-1H 18 PLN mln 2015 2016 2017 1H 18 CAGR acquisitions and a subsequent merger of Bank Społem and Bank Wschodni Net loans 10 540 11 398 11 731 11 905

  5. Slide 5: Strategic rationale

    Strategic rationale  As a result of the acquisition, Bank Millennium will achieve clear #7 position in the Polish Increased scale on the banking system 1 market  Acquisition will add 1.4 mln new clients and allow Bank Millennium to reach Top-6 banks by number of retail clients in Poland  In line

  6. Slide 6: Transaction will allow Bank Millennium to consolidate its position in the Polish banking sector

    Transaction will allow Bank Millennium to consolidate its position in the Polish banking sector … 1-2 Net loans (PLN bn)¹ Non-mortgage gross retail loans (PLN bn)¹ Customer deposits (PLN bn) ¹ … boosting presence in the consumer loan segment Source: financial statements and presentations of Polish b

  7. Slide 7: … and will significantly expand Bank's customer base and further strengthen its client acquisition engine

    … and will significantly expand Bank’s customer base and further strengthen its powerful client acquisition engine 1-2 Acquisition will increase Bank Millennium’s client base ... … allowing it to reach top 6 position by # of retail clients # of retail clients (mln) # of retail clients as at Jun-18 (

  8. Slide 8: eurobank offers Bank Millennium the ability to jump into franchise distribution model…

    eurobank offers Bank Millennium the ability to jump into franchise distribution model… 3 No of own & franchise branches at Polish market (1H 2018) eurobank will add more than 200 new 1 cities with 4.5 mln inhabitants to Bank 1 776 Combined bank with 2.4 times Millennium’s coverage bigger distributi

  9. Slide 9: … and will boost Bank's geographic presence across Poland

    … and will boost Bank’s geographic presence across Poland 3 Bank Millennium and eurobank distribution networks Eurobank network focused on small cities ¹ Network distribution by size of the city 33% ​Large 62% ​67% ​Small ​38% ​67% ​38% Millennium network current coverage Additional coverage by euro

  10. Slide 10: Positive deployment of capital and liquidity without need of external financing

    Positive deployment of capital and liquidity without need of external financing 4 Capital impact on Bank Millennium Group 34.8 +9.0 43.8 RWAs  Assumed increase of RWA reflects the guarantee from (PLN bn) Société Générale S.A., reducing effective risk weight of 20,9% acquired FX mortgages 15,9% 17,2

  11. Slide 11: Significant synergy potential …

    Significant synergy potential … 4 Overview of synergies Business synergies 3 (pre-tax, PLN mln)  Total pre-tax integration costs of c.a. 350 mln PLN ¹ spread over 2019 – 2022 but predominantly incurred in first two years, while expected 5 year synergies to be c.a. 650 mln PLN  Targeted fully-loade

  12. Slide 12: … if delivered, should bring high EPS accretion of the transaction

    … if delivered, should bring high EPS accretion of the transaction 4 Market leading cost efficiency of Bank Millennium should facilitate achievement of cost synergy targets Operating expenses over average assets (2017) 3,3% 2,8%  4% OPEX increase for 27% 2,2% 2,3% 1,9% 2,0% 2,0% growth in retail cu

  13. Slide 13: Simple transaction structure

    Simple transaction structure 1 2 3 Current structure Transaction Post-transaction structure 100% 100% EB stock SG Financial SG Financial Services Minorities Services Minorities Holding Holding Cash 99.79% 0.21% 99.79% 0.21%  SG Financial Services Holding to sell ca.  Bank Millennium will buy SG Fi

  14. Slide 14: Expected timeline

    Expected timeline 4Q 2018 Signing of the transaction Preparation of transition and 1Q 2019 implementation Transaction approvals by KNF, Competition authorities and plan notification to ECB 2Q 2019 Transaction closing Legal merger Customers migration on one IT Operational merger 4Q 2019 system 14

  15. Slide 15: Key takeaways

    Key takeaways Acquisition will allow Bank Millennium to become a Top-6 player in attractive non-mortgage 1 retail segment 1.4 mln new clients will help Bank Millennium to reach Top-6 by number of retail clients in 2 Poland 3 Complementary branch network with focus on smaller cities Risks related to

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